sarah woodjetts​multi channel ecommerce consultant

Park Group Optimised For Online Customers

In 2006, Christmas savings business Farepak collapsed, when it was revealed to around 114,000 customers that their money was being used to support the parent company. This meant trouble for the Park Group, as customers fled the sector and lost the company a third of its 600,000 consumers. Park was set up nearly 50 years ago so that low paid individuals had the opportunity to save their money outside of the bank for Christmas luxuries. By the end of 2006, the sector had around 700,000 customers, many with low incomes who were careful with their cash. After Farepak’s breakdown, Park became the dominant operator for hamper businesses in the UK, with only one other operation remaining independent from the Park Group. Despite the impending fall of the industry of Christmas Savings, the Park Group chose to use the one tool which had the power to destroy them to reinvent their business – the Internet. Birkenhead-based Park pulled out the stops and came back bigger and better as a voucher and pre-paid gift card business....

Park’s majority shareholder, Peter Johnson, underwrote the investment for the change and promoted managers internally, making Chris Houghton the new Chief Executive. Since 2010, Park has launched flexecash vouchers and prepaid gift card, redeemable in nearly 100 high street retailers, which can be sent as gifts or given to employees as incentive prizes. Park also opened up to bikes, toys and DVDs, another step in becoming a one-stop-shop for Christmas. Park has held on to their original principle, that items can be paid for over the course of a year, spreading the cost. In the last year, over £100m has come through the website, roughly a third of the total revenue.

Park’s Chief Executive, Chris Houghton said “We are an ecommerce business. People expect in next day because that’s what they are used to”. Thanks to the jump into the online market, where most of Park’s staff were packing hampers 10 years ago, they are now handling accounts and supporting customers via IT and telephone. This gives the company a lot more room to address the problems that arise, such as delivery times, something that is not a problem anymore.

“We are an ecommerce business,” says Mr Houghton. Where a decade ago most of Park’s staff packed hampers during the festive season, now they handle accounts. Park spends about £3m a year on IT with a dedicated team of 50 IT, web and telephone support staff. Delivery times have also quickened. “People expect it next day because that’s what they are used to.”

Park has three Christmas savings brands, which still retain more than 127,000 agents in the UK & Ireland. Each agent earns around 4% commission on the customers they recruit, but now only 5% of the Christmas savings are spent on hampers; the vouchers are a lot more popular. This makes billings higher than revenue, as they record money loaded onto cards or vouchers that has not yet been spent.

It can be suggested that the Park Group made the jump to ecommerce out of necessity, but no-one can say that it wasn’t the right decision…